National President of the Dr. Frank Udemba Jacobs, who expressed the displeasure of manufacturers over the policy of commercial banks as directed by the CBN and BOI, appealed to government to urgently fast track the commencement of operations by the recently established Development Bank of Nigeria, dedicated to industrial development.
The lack of access to funds at liberal cost, the president averred, had been one of the major challenges facing the manufacturing sector, adding that funding for manufacturers should be given priority attention as the sector cannot grow under the prevailing high interest rate.
Jacobs while speaking on telephone yesterday after a courtesy visit to the Minister of Finance, Mrs. Kemi Adeoshun, at her office in Abuja over the weekend, said manufacturers are not finding it easy to secure credits from commercial bank window.
He said the non-oil exports had taken a dip, especially as the Negotiable Duty Credit Card (NDCC), which is part of the Export Expansive Grant (EEG), is no longer being honoured by government, stressing that the EEG/NDCC policy had been very beneficial in promoting manufactured exports but was suspended some years back.
He said: “As at May 30, 2015, an estimated total of N85.4 billion EEG claims were outstanding with the Nigerian Export Promotion Council (NEPC) while a total of N38.105 billion was awaiting the approval of the Federal Ministry of Finance for the issuance of NDCC for release to beneficiaries. Un-utilised NDCC in possession of beneficiaries is currently estimated to be N109 billion.”
Jacobs said the manufacturing sector should be encouraged to build up appropriate capacity to enhance its capacity and produce for domestic consumption and export, thus generating income for the country.
On the effect of multiple taxes and levies, he said: “This issue continues to be a menace to the real sector. After a study carried out by MAN on its effects on businesses and a presentation made to the last administration, a technical committee was set up to harmonise the tax administration in the country. We are appealing that the issue should be re-opened and concluded.”
On the pervasive trade malpractices, the president said smuggling was a major draw-back to the economy, adding: “It facilitates dumping of prohibited commodities into the economy. This and other forms of trade malpractices should be checked.
“We believe that patronage of locally produced items would help to create employment. Our expenditure in favour of imported products is detrimental to the growth of local industry as it increases employment in the country of origin and simultaneously increases poverty in our land. The policy should be enforced through the Ministry of Finance.”
Concerning the management of Export Processing Zones (EPZs), he said: “We have made representations in the past on activities of some companies in the EPZs who rather than comply with the regulations regarding sale of products from the zone, are currently violating the process by taking items from the zone to the Customs zone without paying the appropriate duties.
“This distorts the businesses of some members who have to face the challenging business environment with consequent costs that make their products uncompetitive. A good example is the Paper Group of MAN whose companies are closing down because of influx of products from the FTZ.
“We appeal that the regulation allowing companies in the FTZ to sell 100 per cent of their products to the local market should be revoked in order to provide a level playing ground for all manufacturers.”
